Most flood victims not covered by current programs

Drew Digby, Carlton County lead on a response to Flash Flood of 2012 damage, addressed the Carlton County Board at their last meeting of 2012. In a nutshell, Digby said there are over 400 active cases in the county with 91 residential homes approved for Small Business Administration (SBA) loans totaling $2,392,000 and two county businesses approved for $175,500 in SBA loans.

According to the Minnesota Housing Financing internet site, up to the middle of December only 93 Quick Start loans were awarded for $1.4 million. These loans were for all Northern Minnesota counties affected by the flooding. These funds were made available by the Minnesota Legislature in a special session in August.

Digby also reported that many flood victims were not signed up for any help. "There are still people out there that need help and do not know of the services available," Digby commented by phone interview. "The independent spirit of the local people to rebuild on their own and by their own means is admirable. But there is help to expedite the recovery process."

Commissioner Dick Brenner of Cloquet explained, "Elderly homeowners in their 70s and 80s have been offered a loan from Quick Start that will be totally forgiven in 10 years if they stay in their homes. They ask themselves the question — will I pass on a problem to my children if I die or end up in a nursing situation in which I am forced to sell and a 10-year forgivable loan becomes their burden? They don't want to make that choice. In some cases, elderly are living in housing that should be torn down. It is sad."

One problem with Quick Start loans is that they are not tailored for property older residents occupy that are set up in a life estate status. Quick Start loans use the property as collateral for the loan. This is not possible for life estate property whose interest is held by the children.

Brenner went on to relate that over 200 homes are not rebuildable because of extensive damages or in some cases are in a flood plain. DNR funding is available for purchasing the sites and razing the structures. This program has been available for some time to reduce the number of dwellings in watershed areas and reduce pollution and runoff into protected waters. "The end result is less homes in the area," said Brenner, "and less property on the tax roles. These waterfront properties are limited and market pressures add considerably to the local tax base. The developing tax impact could be huge."

The bottom line is that so far perhaps only a fifth of flood victims have received any help for their residences or businesses. The Quick Start program deadline has been extended to January 31, 2013, but the only catch is that you can only apply for that funding if you had first applied for a SBA loan and were denied. "Just by extending the deadline over 100 new cases were added to the active list," Brenner explained.

There are some positive avenues on the horizon. Carlton County has applied for Minnesota Investment Fund money to help flood-ravaged businesses and word on that possibility will come in shortly. Unfortunately, Carlton County is the only county in the region that has applied for the funding. Other regional businesses must look elsewhere.

Brenner explained that Carlton County is looking at avenues for more help through the Minnesota Legislature. Not all the funding appropriated for the Minnesota Investment Fund has been allocated. With Democrats in control of the House, Senate, and Governorship and Senator Tony Lourey and Representative Mike Sundin part of a strong DFL Northeastern Minnesota legislative team, a Legislative solution is possible.

One local county official summed it up best, "The vast majority of the flood victims did everything right. Paid their mortgage. Had current insurance. The flood was not covered by the insurance and these homeowners are stuck." Some agencies have said that a disaster such as this has a seven-year cycle of resolution. A flood turns into a disaster, which turns into a struggle to rebuild and that finally turns into an economic downturn.